What are FAANG stocks? If you’ve paid any attention to the stock market over the better part of the last decade, you’ve no doubt seen the acronym FAANG mentioned on a regular basis. But have you ever wondered what it means? Well, it was originally FANG and was coined by CNBC Mad Money host Jim Cramer. He wanted to give a nickname to the four dominant tech stocks that were exhibiting record-breaking growth. As a result, it changed the way companies were being analyzed. In 2017, the fifth stock was added to the group. You may be surprised at which one was originally left out; especially given its current status as the most valuable company in the world.
Table of Contents
- Can You Buy FAANG Stocks?
- What Are FAANG Stocks and Introducing FAATMAN
- Why Is Microsoft Not in FAANG?
- What Are the Next FAANG Stocks
Can You Buy FAANG Stocks?
You can absolutely buy FAANG stocks and FAANG stocks ETF. They’re probably some of the best stocks to buy because the tech stock sector has been screaming for a while. That could potentially mean a pullback is coming.
But this sector has been hot for a while. And you can make good money off a strong trend.
Why are the FAANG stocks important for investors to know? Well, you’ll quickly come to see that since 2017, these companies have grown to be some of the largest in the world by market cap.
They also form some of the largest weighted holdings of the benchmark S&P 500 index. So if you ever invest in a broad market ETF or Mutual Fund, there’s a high likelihood that you have some exposure to these stocks already. So without further ado, let’s take a more in depth look at the FAANG stocks and what they do.
F Is For Facebook (NASDAQ: FB)
Facebook is the social media king. There are an estimated 1.85 billion daily active users and a staggering 2.8 billion monthly active users. No other social media platform comes close to Facebook’s reach. And yet, you’ve probably noticed that real-world sentiment towards Facebook has soured over the years.
That’s because of the ongoing controversy over what Facebook does with our data, which was highlighted in the documentary the Social Dilemma. The company also owns extremely valuable brands like Instagram, Oculus Rift, and Whatsapp, the most used messaging app in the world with well over 2 billion global users.
Facebook has a current market cap of roughly $870 billion and trades at a share price of just over $300 per share. This FAANG stocks ETF could be great for your portfolio.
A Is For Amazon (NASDAQ: AMZN)
Amazon’s inclusion in FAANG stocks should come as no surprise. They’ve grown to become the dominant eCommerce brand in the world. Amazon recently revealed that its Prime membership now has over 200 million global subscribers worldwide. The scary thing is that Amazon is currently only operating in 19 countries!
But while online shopping put Amazon on the map, the company has been busy building out other branches of its portfolio. AWS or Amazon Web Services is one of the most widely used cloud-computing platforms in the world.
And it’s rapidly growing each year. It’s estimated that in 2020, AWS already accounted for 10% of Amazon’s total revenues but a whopping 52% of Amazon’s operating income. Amazon owns plenty of brand power in its portfolio as well. This includes Whole Foods, Audible.com, and Twitch, as well as being large investors in electric truck startup Rivian.
A Is For Apple (NASDAQ: AAPL)
It’s hard to imagine FAANG stocks without Apple, but Cramer left the company out despite soon becoming the most valuable brand in the world. They were the first company to hit a market cap of $1 trillion.
Apple is a dominant force in the tech industry with its premium product line that features iPhones, iPads, MacBook computers, Air Pods, and Apple TV.
There may be no single piece of technology that has changed the world more than the iPhone did upon its original release in 2007. Apple is also getting into the electric car industry as CEO Tim Cook announced he was resurrecting Project Titan; which will see the global tech leader make its first foray into the automotive industry.
N Is For Netflix (NASDAQ: NFLX)
Yes, the old DVD mail rental service turned streaming giant was included in FAANG stocks, even though it pales in comparison to the others in terms of size. But Netflix is one of the best examples of an industry disrupting company and truly revolutionized how we think about TV.
Netflix made cutting the cable cord cool. And with over 200 million global subscribers across 190 different countries, it’s truly establishing itself as a global brand.
Netflix streams other network programs. But much of its success has come on the back of its own production, with popular original shows like Stranger Things, Ozark, Bridgerton, and House of Cards. This is another potential FAANG stocks ETF
G Is For Google (NASDAQ: GOOGL)
At the time, yes, Google was still trading under the name Google rather than its parent company Alphabet; which it switched to in 2015. Google needs no introduction as the largest internet search engine in the world.
Google also has a vast ecosystem of products including the popular Pixel phones and laptops. But perhaps most significantly, Google Cloud is a chief rival to AWS in the ever-growing cloud computing network.
With an incredible stable of Google apps which include Google AdSense, GMail, Google Maps, Google translate, Youtube and Google Analytics just to name a few, there’s no bigger brand name on the internet today. Oh, and it also developed the Android mobile platform, which is used on an estimated 71% of smartphones worldwide.
What Are FAANG Stocks and Introducing FAATMAN
Hey, things always change and evolve. Especially when it comes to the tech sector. So while FAANG stocks was a thing in 2013, things have surely changed eight years later right? Well, not exactly. By switching the G in FAANG to another A, we actually have all of the original cast members appearing in FAATMAN as well. So who has since been added to this illustrious list?
What Are FAANG Stocks and Tesla (NASDAQ: TSLA)
The electric vehicle sector was something out of science fiction movies in 2013. But in 2021, you can’t read an investing article without seeing the letters EV plastered all over it. Enter Tesla, the industry leader, and automotive industry disruptor that made loyal investors a boatload of money over the past two years.
Tesla has surged to a $710 billion market cap and is currently more valuable than General Motors, Ford, Toyota, Volkswagen, Daimler, and Nissan combined. As you know, Tesla has incredible brand power around the world. And they’re expanding heavily into Europe, China, and has its sights set on India as well.
Tesla already has several models that are in production and recently reported a record sales quarter of 184,800 vehicles delivered globally. With more tailwinds for 2021 including the heavily rumored FSD or full-self driving autonomous vehicles, the controversial Cybertruck, and potential long-haul delivery game-changer Tesla Semi, there’s little doubt as to why Tesla has been added to the most exclusive group of stocks there is. This is another potential FAANG stocks ETF.
Why Is Microsoft Not in FAANG?
Microsoft has transformed itself from an enterprise software company to a multi-faceted tech behemoth under the guidance of CEO Satya Nadella. Their Azure cloud computing program is yet another competitor in the highly sought after sector, rivalling Google Cloud and AWS.
Microsoft’s gaming has exploded with the latest Xbox Series S and Series X consoles, as well as its ownership of Minecraft and rumored interest in acquiring Discord. Since 2013, Microsoft has also acquired Linkedin, Skype (which later became the foundation for Microsoft Teams). And its most recent purchase, Nuance. At $1.97 trillion, Microsoft is a shade behind Apple as the second most valuable company in the world. Not to mention Microsoft owns Minecraft stock (yes really)
What Are the Next FAANG Stocks
After FAATMAN, which stocks could we see in the next iteration of this group? Here are a few names we have our eyes on that could make the cut.
NVIDIA (NASDAQ: NVDA): Already a near $400 billion company, NVIDIA has emerged as the leader in microchip technology. They have surpassed stalwarts like Intel and AMD. NVIDIA also has its hands in multiple other cookie jars including data centers, autonomous driving, next-gen gaming, and artificial intelligence.
Square (NYSE: SQ): Disrupting the banking sector isn’t easy. But Square is perhaps the fintech company that is set to change the way we think about money. With its Cash App, Square has already digitized payments. And with its integration of cryptocurrencies, stocks via the square stock trading app, the company continues to be on the cutting edge of digital finance.
Tencent (TCEHY): Could a China company crack the list of top stocks in the world? Why not? The Chinese internet conglomerates are among the largest companies in the world, led by Tencent, Baidu, AliBaba, JD.Com, and PinDuoDuo, just to name a few. Tencent is a sprawling business with a heavy focus in the gaming industry. They own Riot games which owns League of Legends, as well as owning a 40% stake in Epic games which owns Fortnite. Tencent also owns large parts of companies like Sea Limited, PinDuoDuo, EV makers NIO and Xpeng, and a host of other brands around the world. They currently have a market cap approaching $800 billion USD, and will likely hit $1 trillion at some point in the near future.
Sometimes you just have to throw a wildcard in there. Bitcoin already has a $1 trillion market cap. And with prices anticipated to top $100,000 USD per coin later this year, Bitcoin is likely to move ahead of gold as the most valuable store of wealth available. Companies like Tesla, Square, PayPal, Visa, and Mastercard already holding Bitcoin on their balance sheets and accepting it as payment. As a result, don’t be surprised if Bitcoin has changed the way we think about currency forever.
We hope this post has answered the question what are FAANG stocks and FAANG stocks ETF. These tech giants are some of the best stocks to trade, invest in, and keep on your watch list. In fact, the options on these stocks are great because of the high liquidity on large caps. Therefore, you can always make money on these stocks.